According to statistics provided by the Canadian Bankers Association, Canadians held an average 74.5 million Visa and MasterCard credit cards in 2011. This averages to about 3 cards per adult—for just Visa and MasterCard. With countless retail stores offering their own credit card programs, it’s no wonder that our wallets are bulging even without the cash.
For the most part, we do a fairly good job at paying off credit card debt. Nearly 70 percent of Canadians pay their credit card balance in full each month so their interest rate is zero. And nearly 55% pay a lot more than the minimum required payment.
However, Alberta residents hold the second highest household debt in Canada. Average consumer debt in our province is $36,223. Credit card debt accounts for about 5.5% of that total household debt. If you’re a high spender, applying for another credit card may be an open invitation to increase your debt. While opening another line of credit may temporarily boost your credit-to-debt ratio, it won’t do you much good if you max out yet another card. Additionally, you may find it difficult to keep track and pay off multiple credit cards if you’re not organized. With multiple cards, you may easily miss a payment, which can hurt your credit score.
Recognize your personal limits and only apply for credit that you need.